Professor Calling For The IOU Solution To The Debt Ceiling Says The Platinum Coin Is An 'Embarrassment To The Country'

Edward Kleinbard, the former Chief of Staff of the U.S.
Congress’s Joint Committee on Taxation, said today that the
option of minting a trillion-dollar coin to work around the debt
ceiling was "far-fetched and an embarrassment to the country as a
first-world power."

Instead, he advocated a different work-around
strategy:give out "IOUs" to existing claims
holders like federal employees, defense
contractors, Medicare service providers, and Social Security
recipients. It's a strategy that has precedent from California's
budget crisis in 2009.

Kleinbard's problem with the platinum-coin option is its
legality. Both Republican and Democratic members of Congress
have argued that it would be a legal interpretation of a 1997
law that says the Treasury can "mint and issue platinum
bullion coins and proof platinum coins in accordance with such
specifications, designs, varieties, quantities, denominations,
and inscriptions as the secretary, in the secretary’s discretion,
may prescribe from time to time."

But that law was intended for commemorative coins.
Kleinbard said that a strict, "hyper-literal interpretation"
would not hold up in court.

"It's taking a statute ... that has one very
small, narrow purpose for which everybody agrees — minting
commemorate coins — and reading it in a hyper-literal way,"
Kleinbard said this morning on a conference call.

Kleinbard said that kind of interpretation ignores the context
and is not consistent with the law's original purpose or intent —
something the court would look to in determining its legality.